Hydrocortisone stimulated glycosaminoglycan (GAG) synthesis, a characteristic of the cartilage phenotype, of rabbit costal chondrocytes in confluent quiescent culture, as judged by the incorporations of [35S]sulfate and [3H]glucosamine. Hydrocortisone also stimulated incorporation of [3H]serine into proteoglycan. The stimulation of GAG synthesis by hydrocortisone was dose-dependent and maximal at a physiological concentration of 10(-7) M. Hydrocortisone also stimulated GAG synthesis in cultures in the log-phase of growth. In this case, its maximal effect was observed at a concentration of 10(-6) M. The magnitude of the increase of GAG synthesis in response to hydrocortisone was larger in confluent culture than in log-phase cultures. Hydrocortisone stimulated DNA synthesis dose-dependently, and its effect was observable at a physiological concentration. However, no stimulation of DNA synthesis by hydrocortisone was observed in serum-free medium, in contrast to that of GAG synthesis. Hydrocortisone also increased protein synthesis and the cell number. Dexamethasone also stimulated the syntheses of both GAG and DNA. These results show that glucocorticoids stimulated both the differentiated phenotype of chondrocytes and the proliferation of rabbit costal chondrocytes in culture. Moreover, the effect of glucocorticoids was primarily on the differentiated phenotype of chondrocytes and its effect on proliferation was permissive.